Most people will now be resigned to receiving a substantially lower bonus, but in commodity trading that may not be the case. According to an article in the Wall Street Journal, commodity desks could generate as much as a third of the net income at Goldman Sachs and Morgan Stanley this year.
Does this mean commodities traders will get paid? The Journal quotes Michael Karp, CEO of search firm Options Group, who says they'll get paid flat at best. But flat looks very generous: last year Karp says top performers made $10-20m.
Whether banks will be able to avoid paying these sums again will depend upon traders' negotiating position and ability to find alternative employment elsewhere.
Hedge funds may yet be interested. Many are said to be turning their backs on trading equity volatility, in favour of trading derivatives based on commodity indices. Utilities and oil majors are also hiring.
Jakob Bloch, managing director of recruiter Commodities Appointments, says banks' ability to be flexible on bonuses may in any case be restricted by contractual agreements guaranteeing traders a proportion of their P&L. "Percentage deals became a lot more popular over the past few years as banks hired in more traders," he says.
Others question this, however. Colleen Quilty, at Correlate Search, says percentage packages remain rare, and that although commodities teams have had a good year, bonus expectations are "humble".
A senior trader at one European house confirms this: "Everyone understands that banks are having a very, very tough time. The game of musical chairs and jumping from one shop to another collecting big guarantees has stopped. People are just happy to have a job."